Wednesday, 16 January 2013

RTI - Are You Ready?

RTI or Real Time Information is the new system
being introduced by HMRC in April 2013 to improve the operation of Pay as you
Earn (PAYE).

Starting this April employers and pension providers
will be required to submit information to HMRC on deductions for PAYE, national
insurance contributions (NICs) and student loans every time they pay their
employees rather than at the end of the year. HMRC believes the introduction of
RTI will help individuals pay the right amount of income tax and National
Insurance Contributions (NIC) throughout the tax year.

How will RTI
benefit my business?

On the plus
side,it should make the PAYE process simpler and less of
a burden for businesses by streamlining paperwork as well as simplify the
employee new starter and leaving processes.

For the most
part though RTI underlies the government’s new state
benefits overhaul otherwise known as Universal Credits and enables more
efficient collection of outstanding PAYE and NIC liabilities.

When will RTI
happen?

The new
scheme is being phased in from April 2013. HMRC will notify employers 4-6 weeks
before they must begin using RTI. All employers will be using the RTI service
by October 2013.

Check your
payroll data is accurate for RTI

You will need
to check in advance that your payroll data is accurate and in an appropriate
format for RTI. The information that you submit will be matched against records
held on HMRC’s databases, and any discrepancies could lead to
inaccurate tax calculations or trigger a compliance check.

If your
business is not ready for RTI and you would like some advice please contact us
for a no obligation consultation.